Market Integration, Demand, and the Growth of Firms: Evidence From a Natural Experiment in India

• 成果类型: Article
• 署名作者: Jensen, Robert; Miller, Nolan H.
• 署名单位: University of Pennsylvania; National Bureau of Economic Research; University of Illinois System; University of Illinois Urbana-Champaign
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20161965
• 发表日期: 2018
• 页码: 3583-3625
• 关键词: DEVELOPING-COUNTRIES; mobile phones; PRODUCTIVITY; INFORMATION; TRADE; microenterprises; DYNAMICS; returns; credit; plants

摘要

In many developing countries, the average firm is small, does not grow, and has low productivity. Lack of market integration and limited information on non-local products often leave consumers unaware of the prices and quality of non-local firms. They therefore mostly buy locally, limiting firms' potential market size (and competition). We explore this hypothesis using a natural experiment in the Kerala boat-building industry. As consumers learn more about non-local builders, high-quality builders gain market share and grow, while low-quality firms exit. Aggregate quality increases, as does labor specialization, and average production costs decrease. Finally, quality-adjusted consumer prices decline.